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Oil-for-Food Inquiry Wins Russian Backing; Volcker to Take Over

Russia has dropped its objection to a proposed investigation of the scandal-ridden United Nations oil-for-food program in Iraq, clearing the way for Paul A. Volcker, the former Federal Reserve chairman, to take up his post as chairman of the inquiry on Wednesday.

The allegations of corruption and cover-up have damaged the reputation of the United Nations just as it is being asked to take the lead in shaping the interim government that is to take power in Iraq on June 30 and to assist the country in planning elections and drawing up a constitution.

Critics of the United Nations have said the charges raise questions about the fitness of the organization for the Iraqi assignment and cast doubt on the willingness of Secretary General Kofi Annan to permit a thorough investigation.

According to a report last month by the General Accounting Office in Washington, Saddam Hussein's government pocketed more than $10 billion from the program between 1997 and 2002.

An accusation that United Nations officials themselves might have benefited emerged in February when documents from Iraqi ministries reportedly cited Benon V. Sevan, a career United Nations official who led the program, as having accepted oil allotments himself. He denied the charges in a written statement.

ABC News reported Tuesday that a letter it had obtained from the Iraqi Oil Ministry described Mr. Sevan as giving directions indicating which company should handle his personal oil deal, estimated to be worth as much as $3.5 million. Two other people identified only as ''senior U.N. officials'' were suspected of taking ''multimillion-dollar bribes,'' ABC reported.

Responding to the news report, Stephane Dujarric, a United Nations spokesman, said Tuesday night, ''An extremely important aspect of the U.N.'s inquiry is to investigate allegations against any U.N. officials.''

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That inquiry begins officially on Wednesday with the formal appointment of Mr. Volcker, 67, along with Mark Pieth, 50, a Swiss law professor with expertise in investigating money laundering and economic crime, and Richard J. Goldstone, 65, a South African judge who served as prosecutor for the International Criminal Tribunals for the Former Yugoslavia.

They were appointed last week, but the nominations stalled Friday when Russia said it would not agree to a Security Council resolution that Mr. Volcker said he needed to give him the necessary authority. The other veto-bearing members -- Britain, China, France and the United States -- said the resolution was acceptable to them.

Mr. Annan interceded over the weekend, placing a telephone call to Sergey Lavrov, the Russian foreign minister, who until last month was the country's ambassador to the United Nations. On Monday, Russia withdrew its opposition, and a vote on the resolution is scheduled for Wednesday.

The scandal was first reported in January by a Baghdad newspaper, which published a list of prominent people and businesses that it said had illegally profited from the program. In a statement at the time, Moscow denied any wrongdoing by Russians.

The Security Council began the oil-for-food program in December 1996 to enable Iraq to sell oil to ease the impact of the sanctions imposed after the Persian Gulf war of 1991. The proceeds were to go to the purchase of food and other goods, but they ended up financing payoffs, favoritism and kickbacks with systematic smuggling, illegal surcharges and inflated port fees.